At an event in New York announcing the Model S took home the 2013 Motor Trend Car Of The Year trophy, Tesla CEO Elon Musk gave his outlook on the political landscape for the next four years, as it relates to electric vehicles.

“I think that we can expect at least that things will continue as they have. I wouldn’t expect it to get any worse for electric vehicles, hopefully it will get a little better.”

And by better, the Tesla boss means the increase of the $7,500 tax credit against the purchase (or lease) of electric vehicles.

Current And Former Tesla Vehicles

During his speech, Mr. Musk said (unsurprisingly) that he would “back any effort” by the federal government to increase the electric vehicle incentive program to $10,000. This level is seen as necessary to aid in newly re-elected President Obama’s plan to get one million plug-in hybrids, extended-range electric cars and pure electric vehicles on the road by 2015.

On CNBC this morning, Mr. Musk indicated his support behind the Democratic Party and its stance on electric vehicles and the environmental issues. His company has already received full payment of a DoE loan of $465 million to produce the Model S, as well as the Model X (a crossover based on the S), currently scheduled for 2014. The company also has plans for an entry level full electric offering around $30,000.

“We’ve got to stay the course, ramp up production, we’ve got to start making the next generation of vehicles affordable.”

Tesla Model S pricing currently starts at $57,400, or $49,900 after existing $7,500 credit (although that 40 kWh version will not be available until March of 2013).

Changing from a tax credit to an instant rebate would be a larger benefit than the $2,500 increase, but I believe Obama was support both actions in his State of the Union. Since then nothing has been mentioned about it.

It seems unlikely to get increase in dollar value in the current fiscal climate. The change to instant rebate may also balance out the lease/purchase ratio that we are currently seeing also.

FWIW, I leased my 2011 LEAF, but the instant rebate vs. next year tax credit was only a secondary factor in the decision.

Unfortunately, the rebate will only fan the flames of the anti-ev movement. Much of the arguments that the ev-hating crowd has centers around the government subsidies, whether it be the DOE loans or the tax credits for buyers. And ultimately, the prices of the vehicles will have to come down to where they can sell on their own without the credits. So I hope nothing changes in the tax credit regard and I hope that we can look forward to the day when the tax credits are gone and the sticker price of these plug-ins has come down to an affordable level without the credits.

As an EV fan and fiscal conservative who (like most) would prefer lower and flatter tax rates, I’m always baffled when other conservatives complain about lower/flatter taxes that are packaged as an EV tax credit.

Elon is brilliant, but I’m skeptical of his analysis on this. Bigger tax credits will probably help Tesla less than a thriving economy would. Unfortunately, no economy will thrive under a government that appears to be on the verge of insolvency due to excessive deficit spending.